Gig Workers and Compliance: Lessons from the Platform Economy

The gig economy has transformed how services are delivered and how people earn a living. Platforms like Uber, DoorDash, Deliveroo, Upwork, and Fiverr have created new forms of work—blurring the line between employment and entrepreneurship.

But as courts and regulators catch up, companies (even non-platform ones) are facing new challenges around worker classification, compliance, and social protection.

What Is a Gig Worker?

While gig work offers flexibility, it also raises concerns about:

• Lack of benefits and protections
• Inconsistent income
• Employer accountability

Many of the compliance battles in this space center on whether gig workers are truly independent—or de facto employees.

Global Legal Developments

United States

• The ABC Test has been adopted in California (AB5) and influences gig worker classification.
• The Department of Labor issued new guidance (2024) narrowing the criteria for independent contractor status.
• Ongoing lawsuits have challenged companies like Uber and Lyft for misclassifying drivers.

European Union

• The Platform Work Directive (adopted 2024) aims to provide default employee status to platform workers unless the platform can prove independence.
• Countries like Spain and Italy have already enacted local laws reclassifying food delivery couriers as employees.

United Kingdom

• The UK Supreme Court ruled in 2021 that Uber drivers are “workers”, entitled to minimum wage and paid holidays.
• The IR35 legislation also applies to certain self-employed roles that function like employees.

Why This Matters Beyond Platforms

Even if you don’t operate a marketplace app, the gig economy’s classification issues are relevant to:

• Freelancers and consultants
• On-demand, project-based roles
• Remote contractors hired through platforms

HR teams must understand that regulatory momentum is shifting toward tighter definitions of independence and broader employer responsibility.

Common Red Flags

Signs that a gig worker may be misclassified:

• Work is integral to the company’s core operations
• Platform or client sets the price, schedule, or conditions
• Worker wears company branding or uses proprietary tools
• Workers are penalized for refusing assignments

HR Strategies for Gig-Like Work Models

1. Clarify Scope and Autonomy

   Define clear project boundaries. Avoid assigning ongoing tasks that resemble employment.

2. Avoid Control Over Methods

   Let contractors choose when, where, and how they work. Don’t impose policies meant for employees.

3. Review Payment Models

   Outcome-based payments are safer than hourly rates that mimic a wage structure.

4. Limit Exclusivity

   Don’t restrict contractors from working for others unless you’re prepared to classify them as employees.

Leveraging Technology and EORs

For roles that require structure but aren’t quite full-time employees, consider:

• Employer of Record (EOR) services to enable legal employment abroad
• Freelancer platforms that manage tax and compliance (e.g. Deel, Worksome)
• Contractor management systems with built-in compliance logic

Building a Compliant Gig Talent Strategy

HR must partner with legal, procurement, and finance to develop policies that balance flexibility with compliance.

Conclusion

The gig economy isn’t just about delivery apps—it’s reshaping how work is sourced, performed, and regulated. HR teams that understand the evolving legal landscape will be better equipped to innovate, attract talent, and stay compliant in a world where traditional job boundaries no longer apply.